Rosado v. Castillo

Background

Arlene Rosado and Carlos Rosado sued Ignacio Castillo, individually and doing business as “Exclusive Management Co.,” Exclusive Realty Corp., and 118 Realty Assoc., LLC. They alleged violations of the Fair Labor Standards Act (FLSA) and the New York Labor Law (NYLL), including failure to pay minimum wages and overtime wages and failure to provide required wage notices and weekly wage statements. They also sought liquidated damages, interest, attorney’s fees, and costs.

The plaintiffs worked as building superintendents and performed cleaning, maintenance, tenant-service, and apartment-related duties. They alleged that they generally worked 36 hours per week, often worked more than 40 hours, and remained on call around the clock. Arlene was paid $300 per month and received a rent-free apartment; Carlos alleged that he received no compensation. Arlene also paid $150 per month for a phone line used for calls from the management company and tenants. The plaintiffs alleged that they were terminated and ordered to leave their apartment by a letter dated January 27, 2020.

The plaintiffs filed the complaint on May 20, 2020. The defendants were served but did not answer. The clerk entered defaults, and no defendant appeared at the court-ordered conference. The plaintiffs then moved for default judgment under Federal Rule of Civil Procedure 55(b)(2).

Default judgment standard

The court explained that default judgment has two steps: entry of default after a defendant fails to defend, followed by a judgment determining whether the well-pleaded allegations establish liability and what relief is supported by evidence. A default admits well-pleaded factual allegations, but not legal conclusions or the amount of damages. The court therefore still had to determine whether the allegations established liability as a matter of law and whether the plaintiffs substantiated their damages.

Liability

The court held that the allegations established liability under both the FLSA and the NYLL. It found sufficient the allegations that Carlos received no compensation for work performed during the relevant period and worked uncompensated overtime. It also found sufficient Arlene’s allegation that she worked more than 40 hours but was never paid overtime. The court further held that both plaintiffs established liability for the alleged failure to provide required wage notices and wage statements.

Damages

Carlos submitted a calculation seeking unpaid minimum wages for work from 2014 through January 27, 2020, along with liquidated damages and interest. The opinion’s table listed $123,680.06 in unpaid wages and liquidated damages calculated under the stated percentages. The court also awarded each plaintiff $10,000 for the alleged failures to provide the required wage notice and wage statements, for a combined $20,000.

The opinion identifies calculation problems. It states that the plaintiffs’ 2019 unpaid-wage figure appeared to be understated and that the correct 2019 total would be $28,141.50 if the stated assumptions were accurate. It also states that the table’s total should be $246,992.94 rather than $246,992.62. The opinion’s discussion then states a total damages award of $266,992.62, while its conclusion states that the plaintiffs are entitled to a default judgment of $266,922.62. The court granted the plaintiffs leave to move under Rule 60 to correct the judgment by April 12, 2021.

Attorney’s fees and costs

The court granted the request for $6,835.50 in attorney’s fees and costs. Counsel’s billing records showed 18.2 hours at $375 per hour, and the court found that hourly rate reasonable for experienced wage-and-hour litigation in the district.

Disposition

The court ordered entry of default judgment against the defendants. Its conclusion states that the judgment was for $266,922.62, plus $6,835.50 in costs, disbursements, and attorney’s fees, although other portions of the opinion state a damages amount of $266,992.62 and identify additional calculation errors.